SunTrust Banks Inc.'s (STI) first-quarter profit rose 39% as the regional bank reported stronger-than-expected revenue and improving credit quality in its loan books.
Based in Atlanta, the lender caters to an area that was hard hit by the housing downturn. Recent quarters, however, have shown an improving credit climate, helping the bank to reduce funds used to cover potentially risky loans.
SunTrust reported a profit of $250 million, up from a year-earlier profit of $180 million. Per-share earnings, reflecting the payment of preferred dividends, jumped to 46 cents from 8 cents a year ago.
The year-earlier period included $66 million of preferred dividends paid to the U.S. Treasury in relation to funds the bank received under the Troubled Asset Relief Program, or TARP.
Revenue rose 5% to $2.2 billion. Analysts expected earnings of 33 cents a share on $2.1 billion in revenue.
Loan-loss provisions, used to cover potentially souring loans, declined to $317 million in the first quarter from $447 million a year earlier and $327 million in the fourth quarter.